A Comparative Study on Emotional and Incentive Based Loyalty: Unpacking The True Drivers of Customer Retention

Abstract

The comparative effects of incentive-based and emotional loyalty on customer retention in the cutthroat market of today are examined in this study. Discounts and reward points are examples of incentives that draw short term engagement, but emotional loyalty which is based on trust, a personal connection, and brand affinity promotes longer-lasting and more meaningful connections. Convenience sampling was used to gather data from 200 respondents as part of a descriptive study design. For analysis, important statistical methods such the weighted average mean, Spearman's correlation, and the chi-square test were used. Research indicates that emotional loyalty outperforms incentive-based loyalty in terms of trust and retention. Customer retention and emotional connection were found to be significantly positively correlated. Emotional loyalty turned out to be the more powerful driver of overall impact, even though the Chi-square test showed no direct correlation between loyalty type and retention. The study concludes that a balanced approach merging emotional and incentive strategies can help businesses enhance customer loyalty and long-term profitability. The insights can assist marketers in shaping more effective CRM strategies.